Transportation

Administration

Rule 80: Disposition of Surplus Land

Effective Date: 10/06/2026

Admin. Code Reference: R907-80

Rule Type: Current Rule

R907. Transportation, Administration.

R907-80. Disposition of Surplus Land.

R907-80-1. Authority and Purpose.

(1) The Department of Transportation makes this rule pursuant to Sections 72-5-111, 72-5-117, 72-5-404, 78B-6-520.3, and 78B-6-521, which authorize the department to prescribe the terms and conditions for the sale or exchange of surplus right of way and to make rules to ensure that the value of the real property is consistent with the proposed price and other terms of the purchase, sale, or exchange.

(2) Property or property interests that involve federal requirements must be sold or exchanged in accordance with the requirements of 23 C.F.R. Section 710.409.

R907-80-2. Definitions.

As used in this rule:

(1) "Appraisal" means the same as it is defined in Subsection 61-2G-102(1)(a).

(2) "Bidder" means a person who offers to pay a certain amount of money in exchange for title to an interest in real or personal property the department offers for sale.

(3) "Confirmable Delivery Method" means any method of delivering documents that provides a way to confirm they were delivered to the intended party or location.

(4) "Department" means the Utah Department of Transportation.

(5) "Director" means the Executive Director of the Utah Department of Transportation or the Executive Director's designee.

(6) "First right of refusal" means the same as "right of first refusal" and "right of first consideration."

(7) "Minimum acceptable selling price" means a price established by the department based upon the market value of the property as established by an appraisal or other means; plus, costs associated with preparing the property for and executing the sale, such as the costs of advertising, appraising, performing environmental assessments, and processing the transaction.

(8) "Surplus land," "surplus property," or "land" means an estate in real property to which the department is the owner and the director has declared to be surplus.

(9) "Transportation Commission" or "Commission" means the Utah Transportation Commission.

(10) "Utah Public Entity" means a political subdivision of the state, an agency of the state, a county, a municipality, or a special services district of the state, a county, or a municipality.

R907-80-3. Sales or Exchange Initiation Process.

(1) In determining the appropriateness of a parcel of surplus land for sale or exchange, the department may consider nominations by interested parties.

(2) Such a nomination shall in no way obligate the department to the interested party making the nomination.

R907-80-4. Methods of Sale.

(1) Subject to Subsections (2) through (4), the department may sell land or other assets using one of the following methods:

(a) a public sale mail and live auction pursuant to Sections R907-80-6 and R907-80-7;

(b) a negotiated sale or exchange with a grantee that is not a Utah public entity pursuant to Sections R907-80-10 and R907-80-11;

(d) a negotiated sale or exchange with a Utah public entity pursuant to Sections R907-80-5, R907-80-10, R907-80-11, and R907-80-12;

(e) a sale to a large public transit district pursuant to Section R907-80-15; or

(f) a sale to benefit the public interest in affordable housing pursuant to Section R907-80-16.

(2) The department shall execute sales and exchanges pursuant to Sections R933-1-4, R907-80-12, and R907-80-14.

(3) If the department acquired land under threat of condemnation, the department shall comply with Section R907-80-9 before taking any other action.

(4) If the department owns a road by dedication to the public, and if the roadway interest is vacated, the department shall consult with the Attorney General's Office before taking any action.

R907-80-5. Notice to Local Jurisdiction Before Public Sale.

(1) For the purposes of this section:

(a) "Local government" means a county or a municipality.

(b) "Government entity" means a state agency, local government, transit district, or any other political subdivision of the state.

(2)(a) Before conducting a public auction described in Section R907-80-7, the department shall provide no less than 60 days written notice of the intent to proceed with a public auction to the local government with planning and zoning jurisdiction over the land to be sold at the auction.

(b) The notice described in Subsection (2)(a) shall:

(i) reference this rule;

(ii) provide a general description of the land to be sold at the auction; and

(iii) be sent to the chief executive of the local government.

(d) The notice requirements of this Subsection (2) do not apply to:

(i) real property that the department exchanges for another real property; or

(ii) real property the department transfers to another government entity.

(3)(a) If the local government that received the notice described under Subsection (2) would like to purchase the land identified in the notice, the department and the interested local government may enter into a real estate purchase agreement as provided in this Subsection (3) as long as they enter that agreement within 60 days of the date when the notice described in Subsection (2) was delivered.

(b) As part of the real estate purchase agreement, the local government shall agree to:

(i) provide a refundable earnest money deposit equal to 3% of the agreed-upon sales price of the land;

(ii) subject to Subsection (3)(c), complete all requirements necessary to finalize the purchase of the land within 180 days of signing the agreement;

(iii) pay a purchase price equal to market value established by an appraisal or other means approved by the department; and

(iv) pay for closing costs and other administrative costs associated with purchasing the land.

(c)(i) As determined by the department, the real estate purchase agreement may be extended for up to 180 days if the local government provides a non-refundable earnest money deposit that totals 5% of the agreed-upon sales price of the land.

(ii) A real estate purchase agreement may only be extended once.

(d) If a local government fails to extend the real estate purchase agreement as provided under Subsection (3)(c), the department shall:

(i) void the real estate purchase agreement; and

(ii) refund the earnest money deposit made under Subsection (3)(b)(i)(A).

(4) If the department does not enter into a real estate purchase agreement as described in this section or the department voids a real estate purchase agreement as described in Subsection (3)(d), the department may proceed with selling the property at public auction as provided in this rule.

R907-80-6. Public Sale Notice and Advertising Mail and Live Auctions.

(1) The department may notify the public about the sale of surplus property by commercially feasible methods, including publication of a notice in one or more newspapers of general circulation in the county in which the sale is proposed at least 15 days before the deadline to submit bids pursuant to the requirements of Section R907-80-7.

(2) The notice and any associated advertising shall include a general description of the parcel including township, range, and section, and any other information that may create interest in the sale. The department must also identify the desired form of payment.

(3) The department may advertise public sales using any other methods the director has determined may increase the potential for additional competition at the sale.

R907-80-7. Public Sale - Mail and Live Auctions.

The department shall conduct public sales, mail, and live auctions as follows:

(1) The Comptroller's Office of the department shall accept sealed bids by any means of delivery until 5 P.M. the day before the auction.

(2) The officer conducting the auction shall accept sealed bids by personal delivery on the day of the auction up until the beginning of the auction.

(3)(a) A sealed bid must contain deposit funds in an amount determined and advertised by the department, as required by Section R907-80-4 to purchase the subject property.

(b) The department may require this deposit to consist of certified funds.

(d) The department has the right to reject any bid however submitted.

(4) The department may require buyers who have defaulted on certificates of sale in the past to make larger deposits or submit sealed bids in the form of certified funds even if such a requirement is not contained in the notice of sale.

(5)(a) The officer conducting the auction shall open sealed bids after declaring that the auction has started.

(b) After determining which sealed bid is highest, the officer shall allow bidders willing to bid more than the highest sealed bid received to participate in live bidding.

(6)(a) Bids, whether sealed or live, constitute a valid offer to purchase.

(b) An attempt to withdraw a sealed bid after the first sealed bid has been opened, or an attempt to withdraw or amend a live bid may result in the forfeiture of the bid deposit and any other remedy given by the department at law or equity.

(7) At the conclusion of the auction and subject to the terms of Section R907-80-8, the successful bidder must sign a written offer agreement prepared by the department that states the terms included in the public sale notice.

(8)(a) If the successful bidder defaults on the offer agreement, or otherwise fails to meet the requirements of Section R907-80-12, and upon approval by the director, the property may be offered for sale to the person whose bid was second highest

at the auction provided that the terms of the sale meet or exceed the minimum acceptable selling price established for the subject property.

(b) The department shall give the second highest bidder 30 days from the date of the department's offer to submit the purchase price balance plus costs required by Subsection R907-80-10(5).

(9)(a) The department shall give parties owning authorized improvements on the parcel at the time of the sale 90 days from the date of the sale to remove the improvements.

(b) This provision may not apply when such improvements are permitted under a valid existing right of record when such right survives the sale of the parcel, or the improvements are subject to a separate lease agreement.

R907-80-8. Online or Web-based Public Sale Auctions.

(1) The department may establish an online or web-based application to use in conducting public sale auctions.

(2) The department may subscribe to or use a commercially available online or web-based service to use in conducting public sale auctions, or it may subscribe to or use an online or web-based service provided by a public entity for conducting public sale auctions.

(3) The director must provide written approval to use the online or web-based application or service the department uses for public sale auctions.

(4) For good cause, the director may disqualify a party from participating in the online auction to maintain the integrity of the bidding process.

(5) An example of good cause is when a party has previously participated in an auction and failed to perform its obligations as the winning bidder.

R907-80-9. First Right of Refusal.

(1)(a) If the department does not use any portion of a parcel of property or a permanent easement that the department acquires from a private party for transportation purposes, the department must allow the original grantor an opportunity to repurchase the parcel of property or permanent easement at the original purchase price to the grantor before the department may sell the parcel of property or permanent easement to another buyer, or use it for a reason other than transportation purposes, as required by Sections 72-5-111 and 78B-6-520.3.

(b) The department must send a written offer by certified mail to the original grantor at the original grantor's last known address, offering to sell the acquired property to the original grantor at the department's acquisition price.

(c)(i) The original grantor shall accept the department's offer by certified mail within 90 days of the date the original grantor receives the department's offer.

(ii) If the department does not receive an acceptance of its offer within the 90 days, the department may sell or exchange the parcel of property or permanent easement to someone other than the original buyer.

(d) This requirement does not apply if the original grantor executed a written waiver to waive this right, and the waiver may be executed at any time.

(2)(a)(i) If the department uses any portion of a parcel of property or a permanent easement that it acquires from a private party for transportation purposes, the department must offer the original grantor a right of first refusal to purchase the parcel of property or permanent easement at the current price established for the sale before the department may sell to another buyer as required by Sections 72-5-111 and 78B-6-521.

(ii) The requirement of Subsection (2)(a)(i) only applies if the original grantor has owned real property adjacent to the parcel of property that the department acquired since the date of the original transfer to the department, or, for an easement, if the original grantor or a subsequent bona fide purchaser owns the servient estate subject to the easement.

(b) The department shall offer the holder of this first right of refusal the opportunity to purchase the parcel of property or permanent easement for a price equal to the highest offer received at auction plus costs associated with preparing and bringing to auction the parcel of property or permanent easement.

(c) The department may contact and notify the holder of this first right of refusal of the department's decision to sell at auction the parcel of property or permanent easement, and to provide the holder an opportunity to purchase the parcel of property or permanent easement for an amount equal to the appraised value plus costs associated with preparing the parcel of property or permanent easement for sale or to waive the right by providing the department a written waiver.

(d) Should the holder refuse to accept the department's offer to sell or waive the right, the department will contact the holder as soon as reasonably possible after the auction ends and offer the parcel of property or permanent easement to the holder for a price equal to the highest offer received at auction plus associated costs.

(e)(i) The department shall give the holder of the right 90 days to accept or assign the offer to another buyer.

(ii) Assigning the right may not extend the 90 days allowed to accept the offer.

(f) If the holder of the right does not accept the department's offer within the 90 days, the department may sell the parcel of property or permanent easement to the highest bidder.

(g) If the holder accepts the department's offer, the holder must close the purchase in accordance with Section R907-80-14, and any other pending offer or contract on which the department's offer is based becomes void.

(h) This requirement does not apply if the original grantor executed a written waiver to waive this right, and the waiver may be executed at any time.

R907-80-10. Negotiated Sales, Justifications, Procedures, and Public Notice.

(1)(a) The department may dispose of surplus land by negotiated sale when the director determines such a sale is in the public interest of the state and the department, as set forth in Subsection (1)(b).

(b) The department may sell surplus land or other property by negotiated sale if:

(i) the buyer is a Utah public entity, and the property is being transferred for public use and the public use is established through one of the following methods:

(A) by a written finding presented to the department by the public entity's chief executive that the property will be used for a road, other transportation or transit facility, including bicycle paths and sidewalks, a transportation reinvestment zone created pursuant to Section 11-13-227, a public building or grounds, or a public park; or

(B) by resolution declaring the proposed use of the land qualifies as a valid public use, said resolution to be approved by a public vote by the public entity's governing body at an open meeting after notice to at least adjoining landowners who shall have the opportunity to comment on the proposed public use before the public vote;

(ii) the buyer of the surplus land also owns adjoining land, but only if the department determines that competition for the purchase of the surplus land is not likely;

(iii) the surplus land comprises an easement, and said easement is being released to the owner of the fee simple estate that is subject to the easement;

(iv) the surplus land is being transferred to a public utility, as defined in Section 72-6-116, to provide utility services to the public; or

(v) the director, where any designee of the executive director of the department may only be a deputy director of the department determines a negotiated sale is in the public interest of the state and the department after considering at least the following factors:

(A) the needs of the department for proceeds from surplus sales;

(B) the likelihood of competition to purchase the parcel if sold through public means;

(D) the price to be paid by the buyer;

(E) whether there are any public benefits expected from a negotiated sale that could not be achieved by a public sale; and

(F) any other factor the director determines is relevant to a public interest determination.

(vi) Any negotiated sale carried out pursuant to this rule must be for an established minimum acceptable selling price, unless the land is to be sold to a public entity for a road or park, in which case it may be sold for a lesser amount or at no cost if a clause is placed into the deed that specifies title shall revert to the department if the property ceases to be used for the purpose stated in the deed.

(2) The department may list, or contract with an agent or broker to list for sale a property or property interest on a commercial listing service if the director determines doing so is in the best interest of the state. The department shall utilize a standard procurement process to select an agent or broker.

(3)(a) In the event a party submits a competing offer or offers to purchase the property from the department, the department must evaluate the offer or offers and accept the offer that best serves the interests of the state and the department after consideration of the factors identified in Subsection (1)(e).

(b) If the department receives multiple offers, the department may request the best and final offers from offerors.

(c) A written justification statement that articulates the reasoning used to determine the offer that best serves the interests of the state, and the department must be a part of negotiated sales files.

(4)(a) The department may require a buyer of surplus land purchased through a negotiated sale to reimburse the department for costs incurred in preparing the parcel for sale.

(b) These costs may include costs for advertising, appraisal, environmental assessments, and a sale processing charge.

R907-80-11. Negotiated Exchanges.

(1) The department may exchange real property for other real property with a Utah public entity, an individual, a business, a private enterprise, or a not-for-profit organization.

(2) Exchanges may be made to acquire land the department needs for highway use in compliance with the approval requirements of Subsection 72-5-111(1)(c).

(3) Real property exchange transactions are not subject to competitive solicitation procedures.

(4) Exchanges of surplus real property must comply with state law.

(5) The financial consideration received for any real property exchange to an individual, business, private enterprise, or not-for-profit organization must be equal to or higher than the current market value of the department's real property, as determined by any reasonable means.

(6)(a) Real property received in an exchange must be free from liens, encumbrances, and clouds on title unless the director determines after review that accepting the property is in the best interests of the state.

(b) The director's justification for accepting property with a lien, encumbrance, or cloud on title must be in writing.

R907-80-12. Contracts of Sale or Exchange.

(1)(a) The department shall prepare and deliver a contract of sale to the buyer following a public auction sale or upon concurrence of the parties in a negotiated sale or an exchange.

(b) This contract must contain the legal description of subject property or properties, and include:

(i) information regarding the amount paid or the values of the properties exchanged;

(ii) the identities of buyer of the land or the entity or entities participating in the exchange with the department;

(iii) remedies the department may elect in the event of a default; and

(iv) any other terms, covenants, deed restrictions, or conditions the department considers appropriate.

(2)(a) Buyers or persons participating in a property exchange must execute contracts of sale or exchange and return them to the department within 20 days from the date the department delivers the contract.

(b) If the department does not receive the contract within the 20-day period, the department shall send notice by a confirmable delivery method to the buyer or exchanging party giving notice that after 10 days the transaction may be canceled with monies received by the department, including any deposit made, shall be forfeited to the department.

(3) The department reserves the right to cancel a sale or exchange of surplus land for any reason before execution of the contract by the director.

(4) The department shall issue a quit claim deed to the appropriate person upon payment in full or amounts owed to the department and surrender of the original contract of sale or exchange for any tract of land sold or exchanged, but the department may use a different form of deed if written justification is documented.

R907-80-13. Competition Protection.

(1)(a) Collusion between bidders or between a bidder and an employee or agent of the department to affect a public sale auction is prohibited.

(b) Anyone having reason to believe that a public sale auction conducted under this rule may have been affected by collusion between bidders or between one or more bidders and an employee or agent of the department must report that information to the attorney general as soon as reasonably possible.

(2) Should an adjudicative body determine that collusion intended to affect a public sale auction conducted under this rule has occurred, the department shall void the resulting sale.

R907-80-14. Closings.

(1) Auction sales, negotiated sales, or negotiated exchanges must go through this closing process.

(2)(a) Transactions must be closed within 60 days after the date of the contract unless good cause exists to delay the closing. Information intended to show good cause that warrants delaying a closing exists must be provided in writing to the director within 30 days after the date of the contract.

(b) The director must determine if good cause to delay exists.

(3) A minimum of 3% security deposit on a negotiated sale shall be held in escrow.

(4) If closing does not complete within 60 days after the date of the contract, the deposit money becomes non-refundable if the director decides good cause to delay does not exist.

(5) If closing is not complete within the 60 days after the date of the contract and the director determines that good cause to delay does not exist, the buyer still wishes to buy the property, and the department agrees to allow the buyer more time to complete the purchase, the buyer must provide an additional 7% security deposit to the department to be held in escrow and the parties shall have an additional 30 days after the date of the contract to close.

(6) If the buyer does not provide the additional 7% security deposit required by Subsection R907-80-13(5) within five business days after the date the department agrees to allow the buyer more time to complete the purchase, the purchase contract is voidable by the department, and the department may contact the next highest bidder who will then have an opportunity to purchase the property.

(7) If closing is not complete within the additional 30 days allowed by Subsection R907-80-13(5), deposit money becomes non-refundable, the contract becomes voidable by the department and the department may provide the next highest bidder an opportunity to purchase the property.

(8) The director has the authority to extend the time frames allowed to close a transaction if the director determines that doing so serves the public interest of the state.

(9)(a) The closing of a real property transaction may be conducted at a title company provided the buyer pays for related costs.

(b) If a title company is used for closing, the department shall instruct the company to record the deed, and after recording, send it to the Department of Transportation, Director of Right of Way.

(10) Only the director may sign closing papers, real property contracts, or deeds.

R907-80-15. Sale or Exchange Involving a Large Public Transit District.

(1) As used in this Section R907-80-15, the following definitions apply:

(a) "Fixed guideway capital development" means the same as that term is defined in Section 72-1-102;

(b) "Large public transit district" means the same as that term is defined in Section 17B-2a-802.

(2) Notwithstanding this rule, the department may provide for the sale or exchange of real property, with or without charge, to a large public transit district if the director determines that the real property:

(a) is within the boundaries of a station area that has a station area plan certified by a metropolitan planning organization in accordance with Section 10-9a-403.1;

(b) is part of a transit-oriented development or transit-supportive development as defined in Section 17B-2a-802;

(d) will only be used by the large public transit district in a manner that the director determines will provide a benefit to the state transportation system.

(3)(a) Before selling or exchanging land under this Section R907-80-15, the department and the large public transit district shall enter into an agreement to state the terms of the sale or exchange.

(b) The director must approve and sign the agreement described in Subsection R907-80-15(2)(a).

(c) Any agreement described in Subsection R907-80-15(2)(a) shall include provisions the director determines necessary to ensure the real property is used for the purposes outlined in Section 72-5-117 and the agreement.

(4) contrary provisions in Rule R907-80, this Section R907-80-15 applies to the department's real property whether or not the real property is surplus.

R907-80-16. Surplus Property for Public Interests in Housing.

(1)(a) The department may sell property to benefit the public interest in affordable housing in accordance with Sections 63L-12-101 and 63L-12-102 and Subsection 72-5-117(2)(e).

(b) Before selling property under this Subsection (1), the department shall designate the property, in accordance with Subsection (3), as property to be sold to benefit the public interest in affordable housing.

(d) When selling property under this Subsection (1), the department shall ensure that the deed of sale:

(i) restricts use of the property to owner-occupied moderate-income housing for at least 30 years after the day on which each moderate-income housing unit is completed and occupied; and

(ii) includes any additional deed restrictions needed to protect the public interest in affordable housing.

(e) Except as provided in Sections 63L-12-101 and 63L-12-102, when selling property under this Subsection (1), the department shall comply with all other provisions of law that apply to the department's granting of real property.

(2)(a) As authorized by Subsection 72-5-117(2)(f), the department may sell property to benefit the public interest in affordable housing to:

(i) the Utah Housing Corporation;

(ii) the Utah Division of Housing; or

(iii) another state agency or independent entity created to administer the public interest in housing, if any.

(b) The department may sell property under this Subsection (2) when designated for such a sale in accordance with Subsection (3), and the sale may be at a pre-entitlement appraised value, which means the value of the department property:

(i) when the property can only be used as required by this Subsection (2);

(ii) before a deed restriction is placed in the title to the property; and

(iii) based on hypothetical conditions and extraordinary assumptions in an appraisal performed solely for the department as the audience for the appraisal.

(c) The department may defer the purchaser's payment of the pre-entitlement appraised value by a purchaser described in Subsection (2)(b) for up to five years, provided that the department:

(i) enters a repayment agreement with the purchaser before closing;

(ii) requires the purchaser to pay the deferred amount within the time the department sets; and

(iii) requires the purchaser to pay closing costs at the time of sale regardless of any deferral.

(d) If a purchaser fails to pay as required under Subsection (2)(c)(ii), the department may seek direct transfer of the deferred amount from the state treasurer's office or another applicable financial entity, or pursue any other available remedy.

(e) Except as provided in this Subsection (2), the department shall comply with all other provisions of law that apply to the department's granting of real property.

(3)(a) Before the department may pursue a sale under this section:

(i) the department shall designate and approve a parcel for sale under Subsection (1) or (2); and

(ii) the director and the director of right of way shall approve the designation.

(b) In determining whether to designate property under this Subsection (3), the department may consider whether:

(i) the property's size and location reasonably allow construction of multiple owner-occupied affordable housing units;

(ii) the department acquired the property using only state funds, or, if federal funding requirements apply, the department has obtained approval for the sale under 23 C.F.R. 710.409;

(iii) the public benefit of using the property for affordable housing outweighs the department's need to use the property for transportation purposes or to obtain unrestricted sale proceeds;

(iv) the purchaser can secure suitable arrangements with local government entities to allow construction of the units;

(v) the property will have reasonable access to transit or parking facilities accessible at the time when housing units are offered for sale; and

(vi) other factors relevant to the sale.

(c) Once a parcel is designated under this Subsection (3), the department may only sell a designated parcel in accordance with Subsection (1) or (2) unless the designation lapses or is removed under Subsection (3)(d).

(d) A property designation under this section remains in effect until the earlier of:

(i) two years after the designation date; or

(ii) the department's director and director of right of way remove the designation through a written document that includes the justification for removing the designation.

(e) Once a designation is removed under this section, the department shall administer any sale or other action for the property in compliance with otherwise applicable requirements.

(4) The following apply to all sales under this section:

(a) upon purchasing real property conveyed under this section, the receiving entity assumes responsibility for all costs, maintenance, liabilities, and obligations associated with the property, and the department retains no further responsibility;

(b) the purchasing entity shall pay any closing costs determined by the department at the time of conveyance;

(d) the department may obtain an appraisal up to 12 months before the sale;

(e) the department shall include deed restrictions and require other terms protecting the public interest in affordable housing, and the department may include additional deed restrictions and terms for transportation purposes;

(f) the department shall require that any reduction in value under this section benefit only owner-occupants of affordable housing units, and the department shall prohibit any person or entity from diverting or reallocating that value, colluding to improperly obtain it, or otherwise acting contrary to this requirement;

(g) the department retains the sole right to recover any value improperly obtained by a person or entity in connection with department property, and shall require the purchasing entity to take reasonable steps to recover that value and remit any value recovered to the department; and

(h) the department may conduct sales under this section in conjunction with other development requirements, such as the requirements of a transportation reinvestment zone created under Section 63N-23-901.

KEY: surplus land, negotiated exchanges, public sales auctions, negotiated sales

Date of Last Change: October 6, 2026

Notice of Continuation: April 21, 2022

Authorizing, and Implemented or Interpreted Law: 72-5-117; 72-5-111; 72-5-404